In the recent monsoon session of Parliament, both Houses passed the Mediation Bill, 2023, and

upon receiving the assent of the President of India, is referred to as the Mediation Act, 2023. This
Act seeks to promote mediation, particularly institutional mediation, and provide a mechanism for
enforcing mediated settlement agreements.

What is Mediation?

 Mediation is a voluntary, binding process in which an impartial and neutral mediator

facilitates disputing parties in reaching a settlement.

 A mediator does not impose a solution but creates a conducive environment in which
disputing parties can resolve all their disputes.

 Mediation is a tried and tested alternative method of dispute resolution. It has proved to be
a great success in the cities of Delhi, Ranchi, Jamshedpur, Nagpur, Chandigarh and
Aurangabad.

 Mediation is a structured process where a neutral person uses specialized communication

and negotiation techniques. Litigants participating in the mediation process have
unequivocally endorsed it.

 Other than mediation there are some other dispute resolution methods such
as Arbitration, Negotiation and Conciliation.

What are the Key Features of the Act ?

 Pre-litigation Mediation:

o Parties must attempt to settle civil or commercial disputes by mediation before

approaching any court or certain tribunals.

o Even if they fail to reach a settlement through pre-litigation mediation, the court or
tribunal may at any stage refer the parties to mediation.

 Disputes not Fit for Mediation:

o The Act contains a list of disputes which are not fit for mediation. These include
disputes:

 relating to claims against minors or persons of unsound mind,

 involving criminal prosecution, and

 affecting the rights of third parties.

o The central government may amend this list.

 Applicability:

o The Act will apply to mediations conducted in India:

 involving only domestic parties,

 involving at least one foreign party and relating to a commercial dispute,

 if the mediation agreement states that mediation will be as per this Act.
  Mediation Process:

o Mediation proceedings will be confidential, and must be completed within 180 days
(may be extended by 180 days by the parties).

o A party may withdraw from mediation after two sessions.

 Mediators:

o Mediators may be appointed by:

 the parties by agreement, or

 a mediation service provider.

o Mediators must disclose any conflict of interest that may raise doubts on their
independence.

 Mediation Council of India:

o The central government will establish the Mediation Council of India.

o The Council will consist of

 a chairperson,

 two full-time members (with experience in mediation or ADR),

 three ex-officio members (including the Law Secretary, and the Expenditure
Secretary), and

 a part-time member from an industry body.

o Functions of the Council include: (i) registration of mediators, and (ii) recognising
mediation service providers and mediation institutes.

 Mediated Settlement Agreement:

o Agreements resulting from mediation (other than community mediation) will be

final, binding, and enforceable in the same manner as court judgments.

o They may be challenged on grounds of:

 fraud

 corruption

 impersonation

 relating to disputes not fit for mediation.

 Community Mediation:

o Community mediation may be attempted to resolve disputes likely to affect the

peace and harmony amongst residents of a locality.

o It will be conducted by a panel of three mediators.

Why does India Need to Promote Mediation?

  To Tackle Case Pendency:

o As of May 2022, over 4.7 crore cases are pending in courts across different levels of
the judiciary. Of them, 87.4% are pending in subordinate courts, 12.4% in High
Courts.

o Thus to reduce the case pendency,the Mediation and Conciliation Project

Committee of the Supreme Court of India describes mediation as a tried and tested
alternative for conflict resolution

 Absence of Standalone Laws on Mediation :

o There are several statutes containing mediation provisions, such as

 the Code of Civil Procedure, 1908,

 the Arbitration and Conciliation Act, 1996,

 the Companies Act, 2013, the Commercial Courts Act, 2015, and

 the Consumer Protection Act, 2019

o Despite the presence of above statutes, there is no dedicated standalone mediation

legislation In India.

o Various countries including Australia, Singapore, and Italy already have standalone
laws on mediation.

 Mediation as Tool for True Justice and Social Change :

o Mediation simplifies the delivery of justice through plain language and proves to be
a cost-effective alternative to traditional methods.

o The resolution arrived during mediation secures true justice for individuals where
social norms are brought in consonance with Constitutional values through the
exchange of ideas and flow of information.

 Aspirations to Become an International Mediation Hub :

o The Singapore Convention on Mediation is a uniform and efficient framework for

international settlement agreements resulting from mediation.

o As India is a signatory to the Singapore Convention on Mediation (since 2019), it is

appropriate to enact a law governing domestic and international mediation.

o It will boost India’s credential to become an International Mediation Hub.

What are the Key Issues and Concerns with the Act ?

 Mandating Pre-litigation Mediation:

o According to the Act, pre-litigation mediation is mandatory for both parties before
filing any suit or proceeding in a court, whether or not there is a mediation
agreement between them.

o However, as per Article 21 of the Constitution, access to justice is a fundamental

right which cannot be fettered or restricted.
 Limited Relevant Experience of Mediators:

o While the full-time members of the Council must possess knowledge or experience
pertaining to mediation or ADR laws and mechanisms, they may not necessarily be
practicing mediators with significant experience.

o For instance, the Act would permit an arbitrator to be appointed as a full-time

member of the Council. An arbitrator may not be best suited to perform functions
such as prescribing standards of professional conduct of mediators.

 Requiring Central Government Approval before issuing Regulations:

o Under the Act, the Council will discharge its major functions by issuing regulations. It
must take approval from the central government before issuing such regulations.

o Thus, Council's effectiveness could be limited if it requires central government

approval for its core functions. Similar organizations don’t require prior approval
before issuing regulations. e.g. National Medical Commission and the Bar Council of
India.

 Challenges in Enforcing International Settlements:

o The Act considers international mediation to be domestic when it is conducted in

India with the settlement being recognised as a judgment or decree of a court.

o The Singapore Convention does not apply to settlements that already have the
status of judgments or decrees. As a result, conducting cross-border mediation in
India will exclude the tremendous benefits of worldwide enforceability.

 Multiple registration needed for Mediators:

o Mediators must be registered registered/ empanelled at all four places:

 Mediation Council of India,

 Empanelled by a court annexed mediation center,

 A recognised mediation service provider, and

 A Legal Services Authority .

o It is unclear why satisfying any one of these conditions is not sufficient for such
mediators.

 Undefined Terminology:

o Clause 8 of the Act entitles a party to move the Court, before the commencement or
during mediation, for interim relief, only in “exceptional circumstances”.

o The term “exceptional circumstances” is undefined in the Act.

 Issues with Online Mediation:

o A recent NITI Aayog report reveals that only 55%of India have access to the internet
and only 27 % possess compatible devices.

o This poses an accessibility problem for a significant portion of the population.

  Issues with Community Mediation :

o As for community mediation, the Act makes it mandatory to have a panel of three
mediators.

 Community Mediation is a powerful tool that offers an opportunity for

people to resolve disputes through managed communication.

o This requirement seems unnecessary and impinges on the flexibility that mediation
brings.

What are the Steps Ahead ?

 Phased Introduction of Mandatory Pre-litigation :

o Rolling out mandatory pre-litigation mediation in a phased manner, first for certain
categories of disputes and then eventually to cover a wide range of disputes.

 Reduce Time Frame:

o The Parliamentary Standing Committee Report on Mediation Bill,

2021 recommended reduction in the time for concluding a mediation from 180 to 90
days.

 Capacity Building :

o NITI Aayog noted that a framework for mandatory pre-litigation mediation in India
must be planned keeping in mind the number of mediators available and the
ecosystem’s ability to provide a large number of mediators.

o The Mediation and Conciliation Project Committee, Supreme Court of India, has
recommended steps to lay down model mediation codes, facilitate training of
mediators across the country and regulate the process across all districts.

 Scaling Accessibility:

o For online mediation to be a success, we will have to scale our bandwidth

accessibility to remote parts of the country.

o Setting up legal aid or access to justice clinics with adequate IT infrastructure could
address this issue.

 Use of Disruptive Technologies :

o International Arbitration (IA) and Artificial Intelligence (AI) are leading alternatives to
conventional practices. IA replaces conventional dispute resolution methods, while
AI replaces traditional performance approaches.

o Artificial Intelligence could provide immense benefits for the arbitration process and
its users. By augmenting human cognitive abilities, AI powered services could assist
lawyers in drafting, identification of better authorities, reviewing of documents, etc.

Conclusion:
The future of mediation in India lies in its ability to impact social change in a manner that law does
not. The Act should be implemented more in spirit than in form as a famous jurist rightly held that,“it
is the spirit and not the form which keeps justice alive.”

The Mediation Act 2023 has been notified in the gazette of India after receiving the assent of the
President of India on September 15 2023. The act aims to promote and facilitate institutional
mediation for resolution of commercial and other disputes. It also seeks to encourage community
mediation and to make online mediation as acceptable and cost effective process.

Key Features of Mediation Act 2023

The act requires persons to try to settle civil or commercial

Settlement of Disputes through
disputes through mediation before approaching any court or
Mediation
tribunal.

The Act permits parties to a dispute (regardless of whether

they have executed a mediation agreement) to voluntarily and
mutually refer their dispute to mediation prior to filing a suit or
Pre-Litigation Mediation
instituting proceedings before any court. Pre-litigation
mediation has been made voluntary(departure from earlier
bill).

Mediation proceedings under the Act must be completed

Time Period for completion of within a period of 120 days from the date of the first
Mediation appearance before the mediator, which may be extended for a
maximum period of 60 days.

The act provides for the setting up of The Mediation Council of

Setting up of Mediation Council of India. Its functions will include registering
India mediators,recognising mediation service
providers and mediation institutes.
 The act aims to govern two forms of mediation-voluntary and
mandatory.A voluntary mediation is where parties under a
written mediation agreement seek mediation. Such an
Forms of Mediation agreement may either be as part of a contract or exist
independently.A Mandatory mediation is, where barring
certain areas of disputes, there is a legal obligation on parties
to mediate before approaching a court/tribunal.

The areas excluded from mediation include serious allegations

of fraud, criminal offenses, environmental matters reserved
Areas excluded from Mediation for the National Green Tribunal, and matters relating to
competition, telecom, securities and electricity law and land
acquisition.

The act will not prevent any court from referring any dispute to
mediation relating to compoundable or matrimonial
Court’s Role during Mediation
offenses connected with or arising out of civil proceedings
between the parties.

Disputes likely to affect peace, harmony and tranquility

Introduction of Concept of amongst the residents or families of any area or locality can
Community Mediation be mediated and settled by a panel of mediators appointed by
the concerned Authority.

What is Mediation and what are other forms of alternate Dispute Mechanisms(ADR)?

Mediation- Mediation is a voluntary process in which parties try to settle disputes with the
assistance of an independent third person (the mediator). It does not impose a solution on the
parties but creates a conducive environment in which they can resolve their dispute. The mediation
process depends on the choice of parties and there are no strict or binding rules of procedure.

In India, mediation was legitimized by Section 89 of the Civil Procedure Code, 1908 before the
enactment of Mediation Act 2023.

Mediation is part of ADR (Alternate Dispute Mechanism).

Alternate Dispute Mechanism- ADR refers to means by which disputes are settled outside the traditional
court system. In India, modes of ADR include arbitration, negotiation, mediation, and Lok Adalats.

ADR Methods Arbitration Mediation Conciliation Negotiation

Neutral Third
Adjudicator Facilitator Facilitator,Evaluator Facilitator
Party

Nature of
Legally Binding Not Legally Binding Not Legally Binding Not Legally Binding
proceeding

Level of formality Formal Informal Informal Informal

Level of Confidentiality as Confidentiality Confidentiality as Confidentiality

Confidentiality determined by law based on trust determined by law based on trust

What is the significance of Mediation Act 2023?

Reduction of huge pendency of court cases cases- The act obligates each party to take steps to settle
their dispute through pre-litigation mediation before approaching an Indian court. It will reduce the
filing of claims before Indian courts. Our courts are already overburdened with 70 thousand cases in
pending in Supreme Court and 60 lakh cases are pending in High Courts.

Strengthening of Alternative Dispute Resolution (ADR)- The bill would facilitate quick disposal of
disputes outside of traditional court systems.Mediation results in the amicable resolution of disputes
in civil, commercial, family, and matrimonial affairs. It helps develop a collaborative approach and
protects relationships between disputants. The act would mitigate the risk of deterioration of the
parties’ relationship due to a publicly fought dispute.

Promotion of ease of doing business- The act has the potential to have a significant positive impact
on the country’s economy and business environment by avoiding delays in the standard process
through the courts.

Emergence of India as a centre of Mediation in the world- The mediation act 2023 can put India on
the global map as a dispute friendly jurisdiction and attract foreign investments. For Ex- Singapore’s
robust mediation ecosystem has attracted greater foreign investments.

Promotion of peace, law and security in the country- The Act provides for provision of community
mediation to settle any dispute likely to affect peace, harmony and tranquillity amongst the residents
or families of any area. This will promote peace, law and security in the society by building consensus
amongst the communities.

Faster outcomes- The Act provides a maximum time period of 180 days for mediation settlement.
The judicial courts normally dispose of civil matters within 3 years on an average.
Mediation is a cost effective method- Mediation is a cost-effective dispute resolution process. For
Example- According to an article published in Harvard Business Review mediation through outside
counsel has an estimated cost of $700,000 and going to courts has an estimated cost of $2.5 million
over a period of three to five years.

Mediation provided similar position to commercial arbitration in India- As the recent amendments
to the Arbitration and Conciliation Act (A&C Act) prioritised institutional arbitration of disputes, the
Act also places emphasis on institutional mediation in India. It envisages “mediation service
providers” to provide mediation services, secretarial assistance and infrastructure for the efficient
conduct of mediation. This will help in generating more avenues of employment and growth in the
country.

Fulfilment of India’s commitment to Singapore Convention on Mediation- India is a signatory to the

Singapore Convention on Mediation (United Nations Convention on International Settlement). This
act is an important step towards fulfilment of Singapore convention.

Read More- Singapore Convention

What are concerns with the Mediation Act 2023?

Enforcement of settlement agreement- A settlement agreement is essentially a contract between

the parties. Sometimes, grounds for challenging are detected at a later stage. However there
are limited grounds listed in the act to challenge the enforcement of a settlement agreement.
Further only a period of 90 days is given to raise any challenge to the settlement agreement. The
settlement agreement clause needs to be re-looked.

“Exceptional circumstances” for seeking interim relief from courts not defined- The Act entitles a
party to move the Court, before the commencement or during mediation, for interim relief, only in
“exceptional circumstances”.The phrase “exceptional circumstances” is lacking in definition within
the Bill.

Challenges with the “online” and “community” mediation introduced by the Act- There are
challenges to online mediation in India. As per recent Niti Aayog report only 55% of India have
access to the internet and only 27% possess compatible devices for effective online mediation.
Further the act makes it mandatory to have a panel of three mediators for community
mediation.This would impact the flexibility that the act seeks to bring for mediation settlement.

Applicability to ‘only commercial’ govt disputes- Government is the biggest litigant in the country.
The act limits the mediation to solely government’s “commercial disputes”. This will not bring down
the pendency of cases.

Composition of the Mediation Council- The Mediation Council has three members-a retired senior
judge, a person with experience of Alternative Dispute Resolution (ADR) law and an academic who
has taught ADR. However, it doesn’t include a single mediator with actual practical knowledge of
mediation.

Excludes the Chief Justice of India from making appointments- The mediation is a form of dispute
resolution and in the judiciary’s domain, but the bill has left the Chief Justice of India from the
picture for making appointments.

Long list of disputes which cannot be mediated- The act provides for a long list of disputes which
should not be mediated. For example, Fraud, Disputes relating to claims against minors, Patents
and copyright cases, proceedings before the TRAI etc. This hampers the overall objective of
alternate dispute mechanism.

Impacts cross-border mediation- The mediation act treats international mediation when conducted
in India as a domestic mediation. Further, the settlement conducted in India is given the status of a
judgment or decree of a court.

But, the Singapore Convention does not apply to settlements that already have the status of a
judgment or decree. Hence, conducting cross-border mediation in India will leave out the
tremendous benefits of worldwide enforceability. This will impact India’s growth as mediation
centre of the world like Singapore.

What Should be the way forward for strengthening mediation in India?

Providing Institutional Support- Establishing well-equipped and accessible mediation centres at

various levels, from local communities to national levels. Government should facilitate opening of
mediation centres. For Example: Recently, Uttar Pradesh got its first mediation & arbitration
centre in the form of ‘Centre for Excellence in Mediation and Arbitration or CEMA.

Training and Certification for Mediation- Developing comprehensive training programs for
mediators, lawyers, and judges to ensure that there is a pool of skilled professionals proficient in
mediation techniques.

Integration of Mediation with Legal Curriculum- Incorporating mediation education within law
school curricula can prepare future legal professionals to consider mediation as a primary or
complementary method for dispute resolution.

Ensuring proper cross border mediation- To ensure worldwide enforceability, the settlement
conducted in India should not be given a status of a judgment or decree of a court.

Need to remove ambiguities in the Act- The are certain elements in the Act like “exceptional
circumstances” for seeking interim relief, which are open-ended and ambiguous, which must be
addressed urgently.

Enhancement of awareness about the Mediation Act- The National and State Legal Services
Authorities should disseminate more information regarding mediation and ADRs, so that they
become the first option explored by potential litigants.

Alternate Dispute Resolutions has proven successful in clearing the backlog of cases in various levels
of the judiciary.For Ex- Lok Adalats alone has disposed more than 50 lakh cases every year on average
in the last three years. A similar impact can be observed with Mediation also. Hence, the
government should address the concerns in the Mediation Act 2023 and ensure proper
implementation of the same.